As the mortgage crisis continues to gain momentum infecting the entire economy in the US many people will be looking for an alternative place to invest as well as an alternative place to live. Costa Rica is in a position to capitalize on the seventy million baby boomers looking to retire or buy a vacation home to enjoy part of the year.
The Rich Report May 2008
WHY SMART MONEY IS MOVING OFFSHORE
by Howard Rich
The Rich Report
Lunch with Harry
My good friend Harry is not the altruistic type. So, when he asked me to meet him for lunch to discuss my first Rich Report, I knew who was paying. I suggested Hanratty’s, a modest uptown establishment. He countered with The Tavern on the Green. Hence, I soon found myself staring out across the grand expanse of Central Park and, of course, picking up the check.
Harry wanted to know why I was so certain that the time has come to invest offshore. Since he manages his own very successful multi-million dollar portfolio, I knew he wasn’t just making small talk. So, over the next hour and a half, or so, I laid it all out for him.
Let me give you the truncated version, because if you’re reading this column, you, like Harry, are a serious investor. And if you’re a serious investor, you probably have some of the same questions Harry had. Then, I’ll finish up with the same “Rich Rewards Best Investment of the Month” I gave him. Fair enough?
Over the past few decades, I have noticed that serious investors share two important traits. First, they reduce their risks by diversifying their portfolios. Now, please understand: it’s not just that they don’t put all their eggs in one basket. Any savvy investor knows not to do that. Serious investors go a step further: they don’t limit their portfolios to eggs at all, or anything even remotely related. They invest across the board: in Blue Chips and start-ups, at home and abroad.
Secondly, serious investors increase their rewards by anticipating trends. They get first call by getting ahead of the curve. Years ago, a sportswriter asked hockey great Wayne Gretzky why he scored so many more goals than his opponents. He replied, “They skate to where the puck has been; I skate to where it’s going.” Enough said.
So, how does all of this apply to my earlier advice about investing in offshore real estate? In the words of “The Happy Warrior” (that would be Al Smith, for you young Turks), “Let’s look at the record.”
I’m convinced that failing to diversify your portfolio beyond U.S. shores today is tantamount to financial suicide. The question is no longer whether we will have a recession; the fact is, it really began last January, or perhaps even earlier when it became clear that the sub-prime debacle had gained momentum. And even the top three presidential candidates have finally realized that it’s already here.
The skyrocketing price of oil is fanning the flames of rising inflation. Agricultural commodities are off the charts, with the price of copper approaching a staggering $4.00 a pound. And the housing market continues to tank, with spiraling foreclosures and plummeting prices threatening to trigger a massive meltdown. Bear-Stearns has already collapsed, and the other investment banks are wobbling precariously. As USA Today recently opined, “If the US economy were a car, all of its warning lights would be flashing red.”
